ARM vs. Fixed-Rate Calculator

ARM vs. Fixed-Rate: Which Costs Less?

Adjustable-rate mortgages start lower but reset to market. This calculator compares total cost over your time horizon, including what happens when the introductory period ends.

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Your Inputs

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yrs

All numbers are estimates. Your real loan depends on credit, equity, property type, and current rates. Run the math, then request a free quote.

Results

ARM Savings vs Fixed (over horizon) $0
Fixed Monthly P&I$0
ARM Monthly, Intro$0
ARM Monthly, Post-Reset$0
Fixed Total (horizon)$0
ARM Total (horizon)$0
Winner
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How to Use It

ARMs Are Tools, Not Tricks

Adjustable-rate mortgages get a bad reputation from the 2008 era, but they're legitimate financial tools when used in the right situation. The key question: how long will you actually keep the loan?

If you'll sell or refinance before the intro period ends, an ARM almost always wins on cost. If you'll keep it through and past the reset, you're betting on where rates go, and the math depends on the assumption you put into the "post-reset rate" field.

Who ARMs Typically Fit

  • Short timeline buyers: moving or selling within the intro period.
  • Refi-confident borrowers: planning to refinance before reset.
  • Strong income buyers: comfortable with a higher payment if rates rise.
  • Wealthy borrowers: using cheap leverage on properties they can pay off any time.

Conservative buyers, first-time homeowners, and anyone unsure about their timeline are usually better with a fixed-rate loan.

Common Questions

Calculator FAQ

How accurate is the post-reset rate assumption?

It's the biggest unknown in the comparison. Try the calculator with several different post-reset rates to see the range of outcomes, that's the real risk profile of an ARM.

What's the difference between 5/1, 7/1, and 10/1?

The first number is the years your rate is fixed. After that, the rate adjusts (typically annually) based on a market index plus a margin set in the loan.

Do ARMs have rate caps?

Yes. Most have an initial adjustment cap (often 2–5%), an annual cap (1–2%), and a lifetime cap (5–6%) above the start rate. The cap limits how much the rate can move at each reset.

Can I refinance an ARM into a fixed?

Yes, it's a common strategy. If rates drop or you decide you want stability, refinancing out of an ARM into a fixed loan works the same as any other refinance.

Are interest-only ARMs available?

Yes, especially in the jumbo space. We offer 10/1 and 7/1 IO ARM programs for qualified high-net-worth borrowers.

How does this compare to a 30-year fixed?

The calculator runs the comparison directly. Sometimes the ARM wins by tens of thousands; sometimes the fixed wins. It depends on your inputs and time horizon.

Numbers Look Right?

Take your inputs and get a real, written rate quote, usually within 1-2 business days.

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